Full Text of HB5111 97th General Assembly
HB5111 97TH GENERAL ASSEMBLY |
| | 97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012 HB5111 Introduced 2/8/2012, by Rep. Frank J. Mautino SYNOPSIS AS INTRODUCED: |
| 35 ILCS 25/10 | | 35 ILCS 25/25 | |
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Amends the Small Business Job Creation Tax Credit Act. Provides that an employee who is employed in the service of the applicant for a basic wage for at least 35 hours each week or who renders a standard of service to the applicant that is generally accepted as full-time employment is considered a full-time employee of the applicant regardless of whether a W-2 is issued for the employee by a professional employer organization. Requires the Department of Commerce and Economic Opportunity to make rules concerning applicants for which a professional employer organization has been contracted to issue W-2s and make payment of withholding taxes.
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| 1 | | AN ACT concerning revenue.
| 2 | | Be it enacted by the People of the State of Illinois,
| 3 | | represented in the General Assembly:
| 4 | | Section 5. The Small Business Job Creation Tax Credit Act | 5 | | is amended by changing Sections 10 and 25 as follows: | 6 | | (35 ILCS 25/10)
| 7 | | (Text of Section before amendment by P.A. 97-636 ) | 8 | | Sec. 10. Definitions. In this Act: | 9 | | "Applicant" means a person that is operating a business | 10 | | located within the State of Illinois that is engaged in | 11 | | interstate or intrastate commerce and either: | 12 | | (1) has no more than 50 full-time employees, without | 13 | | regard to the location of employment of such employees at | 14 | | the beginning of the incentive period; or | 15 | | (2) hired within the incentive period an employee who | 16 | | had participated as worker-trainee in the Put Illinois to | 17 | | Work Program during 2010. | 18 | | In the case of any person that is a member of a unitary | 19 | | business group within the meaning of subdivision (a)(27) of | 20 | | Section 1501 of the Illinois Income Tax Act, "applicant" refers | 21 | | to the unitary business group. | 22 | | "Certificate" means the tax credit certificate issued by | 23 | | the Department under Section 35 of this Act. |
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| 1 | | "Certificate of eligibility" means the certificate issued | 2 | | by the Department under Section 20 of this Act. | 3 | | "Credit" means the amount awarded by the Department to an | 4 | | applicant by issuance of a certificate under Section 35 of this | 5 | | Act for each new full-time equivalent employee hired or job | 6 | | created. | 7 | | "Department" means the Department of Commerce and Economic | 8 | | Opportunity. | 9 | | "Director" means the Director of the Department. | 10 | | "Full-time employee" means an individual who is employed | 11 | | for a basic wage for at least 35 hours each week or who renders | 12 | | any other standard of service generally accepted by industry | 13 | | custom or practice as full-time employment. An individual for | 14 | | whom a W-2 is issued by a Professional Employer Organization is | 15 | | a full-time employee if he or she is employed in the service of | 16 | | the applicant for a basic wage for at least 35 hours each week | 17 | | or renders any other standard of service generally accepted by | 18 | | industry custom or practice as full-time employment. For the | 19 | | purposes of this Act, such an individual shall be considered a | 20 | | full-time employee of the applicant. | 21 | | "Professional Employer Organization" (PEO) shall have the | 22 | | same meaning as defined in Section 5-5 of the Economic | 23 | | Development for a Growing Economy Tax Credit Act. | 24 | | "Incentive period" means the period beginning July 1, 2010 | 25 | | and ending on June 30, 2011. | 26 | | "Basic wage" means compensation for employment that is no |
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| 1 | | less than $10 per hour or the equivalent salary for a new | 2 | | employee. | 3 | | "New employee" means a full-time employee: | 4 | | (1) who first became employed by an applicant with less | 5 | | than 50 full-time employees within the incentive period | 6 | | whose hire results in a net increase in the applicant's | 7 | | full-time Illinois employees and who is receiving a basic | 8 | | wage as compensation; or | 9 | | (2) who participated as a worker-trainee in the Put | 10 | | Illinois to Work Program during 2010 and who is | 11 | | subsequently hired during the incentive period by an | 12 | | applicant and who is receiving a basic wage as | 13 | | compensation. | 14 | | The term "new employee" does not include: | 15 | | (1) a person who was previously employed in Illinois by | 16 | | the applicant or a related member prior to the onset of the | 17 | | incentive period; or | 18 | | (2) any individual who has a direct or indirect | 19 | | ownership interest of at least 5% in the profits, capital, | 20 | | or value of the applicant or a related member. | 21 | | "Noncompliance date" means, in the case of an applicant | 22 | | that is not complying with the requirements of the provisions | 23 | | of this Act, the day following the last date upon which the | 24 | | taxpayer was in compliance with the requirements of the | 25 | | provisions of this Act, as determined by the Director, pursuant | 26 | | to Section 45 of this Act. |
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| 1 | | "Put Illinois to Work Program" means a worker training and | 2 | | employment program that was established by the State of | 3 | | Illinois with funding from the United States Department of | 4 | | Health and Human Services of Emergency Temporary Assistance to | 5 | | Needy Families funds authorized by the American Recovery and | 6 | | Reinvestment Act of 2009 (ARRA TANF Funds). These ARRA TANF | 7 | | funds were in turn used by the State of Illinois to fund the | 8 | | Put Illinois to Work Program. | 9 | | "Related member" means a person that, with respect to the | 10 | | applicant during any portion of the incentive period, is any | 11 | | one of the following, | 12 | | (1) An individual, if the individual and the members of | 13 | | the individual's family (as defined in Section 318 of the | 14 | | Internal Revenue Code) own directly, indirectly, | 15 | | beneficially, or constructively, in the aggregate, at | 16 | | least 50% of the value of the outstanding profits, capital, | 17 | | stock, or other ownership interest in the applicant. | 18 | | (2) A partnership, estate, or trust and any partner or | 19 | | beneficiary, if the partnership, estate, or trust and its | 20 | | partners or beneficiaries own directly, indirectly, | 21 | | beneficially, or constructively, in the aggregate, at | 22 | | least 50% of the profits, capital, stock, or other | 23 | | ownership interest in the applicant. | 24 | | (3) A corporation, and any party related to the | 25 | | corporation in a manner that would require an attribution | 26 | | of stock from the corporation under the attribution rules |
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| 1 | | of Section 318 of the Internal Revenue Code, if the | 2 | | applicant and any other related member own, in the | 3 | | aggregate, directly, indirectly, beneficially, or | 4 | | constructively, at least 50% of the value of the | 5 | | corporation's outstanding stock. | 6 | | (4) A corporation and any party related to that | 7 | | corporation in a manner that would require an attribution | 8 | | of stock from the corporation to the party or from the | 9 | | party to the corporation under the attribution rules of | 10 | | Section 318 of the Internal Revenue Code, if the | 11 | | corporation and all such related parties own, in the | 12 | | aggregate, at least 50% of the profits, capital, stock, or | 13 | | other ownership interest in the applicant. | 14 | | (5) A person to or from whom there is attribution of | 15 | | stock ownership in accordance with Section 1563(e) of the | 16 | | Internal Revenue Code, except that for purposes of | 17 | | determining whether a person is a related member under this | 18 | | paragraph, "20%" shall be substituted for "5%" whenever | 19 | | "5%" appears in Section 1563(e) of the Internal Revenue | 20 | | Code.
| 21 | | (Source: P.A. 96-888, eff. 4-13-10; 96-1498, eff. 1-18-11.) | 22 | | (Text of Section after amendment by P.A. 97-636 ) | 23 | | Sec. 10. Definitions. In this Act: | 24 | | "Applicant" means a person that is operating a business | 25 | | located within the State of Illinois that is engaged in |
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| 1 | | interstate or intrastate commerce and either: | 2 | | (1) has no more than 50 full-time employees, without | 3 | | regard to the location of employment of such employees at | 4 | | the beginning of the incentive period; or | 5 | | (2) hired within the incentive period an employee who | 6 | | had participated as worker-trainee in the Put Illinois to | 7 | | Work Program during 2010. | 8 | | In the case of any person that is a member of a unitary | 9 | | business group within the meaning of subdivision (a)(27) of | 10 | | Section 1501 of the Illinois Income Tax Act, "applicant" refers | 11 | | to the unitary business group. | 12 | | "Certificate" means the tax credit certificate issued by | 13 | | the Department under Section 35 of this Act. | 14 | | "Certificate of eligibility" means the certificate issued | 15 | | by the Department under Section 20 of this Act. | 16 | | "Credit" means the amount awarded by the Department to an | 17 | | applicant by issuance of a certificate under Section 35 of this | 18 | | Act for each new full-time equivalent employee hired or job | 19 | | created. | 20 | | "Department" means the Department of Commerce and Economic | 21 | | Opportunity. | 22 | | "Director" means the Director of the Department. | 23 | | "Full-time employee" means an individual who is employed | 24 | | for a basic wage for at least 35 hours each week or who renders | 25 | | any other standard of service generally accepted by industry | 26 | | custom or practice as full-time employment. An individual for |
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| 1 | | whom a W-2 is issued by a Professional Employer Organization is | 2 | | a full-time employee if he or she is employed in the service of | 3 | | the applicant for a basic wage for at least 35 hours each week | 4 | | or renders any other standard of service generally accepted by | 5 | | industry custom or practice as full-time employment. For the | 6 | | purposes of this Act, such an individual shall be considered a | 7 | | full-time employee of the applicant. | 8 | | "Professional Employer Organization" (PEO) shall have the | 9 | | same meaning as defined in Section 5-5 of the Economic | 10 | | Development for a Growing Economy Tax Credit Act. | 11 | | "Incentive period" means the period beginning on July 1 and | 12 | | ending on June 30 of the following year. The first incentive | 13 | | period shall begin on July 1, 2010 and the last incentive | 14 | | period shall end on June 30, 2016. | 15 | | "Basic wage" means compensation for employment that is no | 16 | | less than $10 per hour or the equivalent salary for a new | 17 | | employee. | 18 | | "New employee" means a full-time employee: | 19 | | (1) who first became employed by an applicant with less | 20 | | than 50 full-time employees within the incentive period | 21 | | whose hire results in a net increase in the applicant's | 22 | | full-time Illinois employees and who is receiving a basic | 23 | | wage as compensation; or | 24 | | (2) who participated as a worker-trainee in the Put | 25 | | Illinois to Work Program during 2010 and who is | 26 | | subsequently hired during the incentive period by an |
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| 1 | | applicant and who is receiving a basic wage as | 2 | | compensation. | 3 | | The term "new employee" does not include: | 4 | | (1) a person who was previously employed in Illinois by | 5 | | the applicant or a related member prior to the onset of the | 6 | | incentive period; or | 7 | | (2) any individual who has a direct or indirect | 8 | | ownership interest of at least 5% in the profits, capital, | 9 | | or value of the applicant or a related member. | 10 | | "Noncompliance date" means, in the case of an applicant | 11 | | that is not complying with the requirements of the provisions | 12 | | of this Act, the day following the last date upon which the | 13 | | taxpayer was in compliance with the requirements of the | 14 | | provisions of this Act, as determined by the Director, pursuant | 15 | | to Section 45 of this Act. | 16 | | "Put Illinois to Work Program" means a worker training and | 17 | | employment program that was established by the State of | 18 | | Illinois with funding from the United States Department of | 19 | | Health and Human Services of Emergency Temporary Assistance to | 20 | | Needy Families funds authorized by the American Recovery and | 21 | | Reinvestment Act of 2009 (ARRA TANF Funds). These ARRA TANF | 22 | | funds were in turn used by the State of Illinois to fund the | 23 | | Put Illinois to Work Program. | 24 | | "Related member" means a person that, with respect to the | 25 | | applicant during any portion of the incentive period, is any | 26 | | one of the following, |
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| 1 | | (1) An individual, if the individual and the members of | 2 | | the individual's family (as defined in Section 318 of the | 3 | | Internal Revenue Code) own directly, indirectly, | 4 | | beneficially, or constructively, in the aggregate, at | 5 | | least 50% of the value of the outstanding profits, capital, | 6 | | stock, or other ownership interest in the applicant. | 7 | | (2) A partnership, estate, or trust and any partner or | 8 | | beneficiary, if the partnership, estate, or trust and its | 9 | | partners or beneficiaries own directly, indirectly, | 10 | | beneficially, or constructively, in the aggregate, at | 11 | | least 50% of the profits, capital, stock, or other | 12 | | ownership interest in the applicant. | 13 | | (3) A corporation, and any party related to the | 14 | | corporation in a manner that would require an attribution | 15 | | of stock from the corporation under the attribution rules | 16 | | of Section 318 of the Internal Revenue Code, if the | 17 | | applicant and any other related member own, in the | 18 | | aggregate, directly, indirectly, beneficially, or | 19 | | constructively, at least 50% of the value of the | 20 | | corporation's outstanding stock. | 21 | | (4) A corporation and any party related to that | 22 | | corporation in a manner that would require an attribution | 23 | | of stock from the corporation to the party or from the | 24 | | party to the corporation under the attribution rules of | 25 | | Section 318 of the Internal Revenue Code, if the | 26 | | corporation and all such related parties own, in the |
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| 1 | | aggregate, at least 50% of the profits, capital, stock, or | 2 | | other ownership interest in the applicant. | 3 | | (5) A person to or from whom there is attribution of | 4 | | stock ownership in accordance with Section 1563(e) of the | 5 | | Internal Revenue Code, except that for purposes of | 6 | | determining whether a person is a related member under this | 7 | | paragraph, "20%" shall be substituted for "5%" whenever | 8 | | "5%" appears in Section 1563(e) of the Internal Revenue | 9 | | Code.
| 10 | | (Source: P.A. 96-888, eff. 4-13-10; 96-1498, eff. 1-18-11; | 11 | | 97-636, eff. 6-1-12.) | 12 | | (35 ILCS 25/25)
| 13 | | (Text of Section before amendment by P.A. 97-636 ) | 14 | | Sec. 25. Tax credit. | 15 | | (a) Subject to the conditions set forth in this Act, an | 16 | | applicant is entitled to a credit against payment of taxes | 17 | | withheld under Section 704A of the Illinois Income Tax Act: | 18 | | (1) for new employees who participated as | 19 | | worker-trainees in the Put Illinois to Work Program during | 20 | | 2010: | 21 | | (A) in the first calendar year ending on or after | 22 | | the date that is 6 months after December 31, 2010, or | 23 | | the date of hire, whichever is later. Under this | 24 | | subparagraph, the applicant is entitled to one-half of | 25 | | the credit allowable for each new employee who is |
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| 1 | | employed for at least 6 months after the date of hire; | 2 | | and | 3 | | (B) in the first calendar year ending on or after | 4 | | the date that is 12 months after December 31, 2010, or | 5 | | the date of hire, whichever is later. Under this | 6 | | subparagraph, the applicant is entitled to one-half of | 7 | | the credit allowable for each new employee who is | 8 | | employed for at least 12 months after the date of hire; | 9 | | (2) for all other new employees, in the first calendar | 10 | | year ending on or after the date that is 12 months after | 11 | | the date of hire of a new employee. The credit shall be | 12 | | allowed as a credit to an applicant for each full-time | 13 | | employee hired during the incentive period that results in | 14 | | a net increase in full-time Illinois employees, where the | 15 | | net increase in the employer's full-time Illinois | 16 | | employees is maintained for at least 12 months. | 17 | | (b) The Department shall make credit awards under this Act | 18 | | to further job creation. | 19 | | (c) The credit shall be claimed for the first calendar year | 20 | | ending on or after the date on which the certificate is issued | 21 | | by the Department. | 22 | | (d) The credit shall not exceed $2,500 per new employee | 23 | | hired. | 24 | | (e) The net increase in full-time Illinois employees, | 25 | | measured on an annual full-time equivalent basis, shall be the | 26 | | total number of full-time Illinois employees of the applicant |
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| 1 | | on June 30, 2011, minus the number of full-time Illinois | 2 | | employees employed by the employer on July 1, 2010. For | 3 | | purposes of the calculation, an employer that begins doing | 4 | | business in this State during the incentive period, as | 5 | | determined by the Director, shall be treated as having zero | 6 | | Illinois employees on July 1, 2010. | 7 | | (f) The net increase in the number of full-time Illinois | 8 | | employees of the applicant under subsection (e) must be | 9 | | sustained continuously for at least 12 months, starting with | 10 | | the date of hire of a new employee during the incentive period. | 11 | | Eligibility for the credit does not depend on the continuous | 12 | | employment of any particular individual. For purposes of this | 13 | | subsection (f), if a new employee ceases to be employed before | 14 | | the completion of the 12-month period for any reason, the net | 15 | | increase in the number of full-time Illinois employees shall be | 16 | | treated as continuous if a different new employee is hired as a | 17 | | replacement within a reasonable time for the same position.
| 18 | | (g) The Department shall promulgate rules to enable an | 19 | | applicant for which a PEO has been contracted to issue W-2s and | 20 | | make payment of taxes withheld under Section 704A of the | 21 | | Illinois Income Tax Act for new employees to retain the benefit | 22 | | of tax credits to which the applicant is otherwise entitled | 23 | | under this Act. | 24 | | (Source: P.A. 96-888, eff. 4-13-10; 96-1498, eff. 1-18-11.) | 25 | | (Text of Section after amendment by P.A. 97-636 ) |
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| 1 | | Sec. 25. Tax credit. | 2 | | (a) Subject to the conditions set forth in this Act, an | 3 | | applicant is entitled to a credit against payment of taxes | 4 | | withheld under Section 704A of the Illinois Income Tax Act: | 5 | | (1) for new employees who participated as | 6 | | worker-trainees in the Put Illinois to Work Program during | 7 | | 2010: | 8 | | (A) in the first calendar year ending on or after | 9 | | the date that is 6 months after December 31, 2010, or | 10 | | the date of hire, whichever is later. Under this | 11 | | subparagraph, the applicant is entitled to one-half of | 12 | | the credit allowable for each new employee who is | 13 | | employed for at least 6 months after the date of hire; | 14 | | and | 15 | | (B) in the first calendar year ending on or after | 16 | | the date that is 12 months after December 31, 2010, or | 17 | | the date of hire, whichever is later. Under this | 18 | | subparagraph, the applicant is entitled to one-half of | 19 | | the credit allowable for each new employee who is | 20 | | employed for at least 12 months after the date of hire; | 21 | | (2) for all other new employees, in the first calendar | 22 | | year ending on or after the date that is 12 months after | 23 | | the date of hire of a new employee. The credit shall be | 24 | | allowed as a credit to an applicant for each full-time | 25 | | employee hired during the incentive period that results in | 26 | | a net increase in full-time Illinois employees, where the |
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| 1 | | net increase in the employer's full-time Illinois | 2 | | employees is maintained for at least 12 months. | 3 | | (b) The Department shall make credit awards under this Act | 4 | | to further job creation. | 5 | | (c) The credit shall be claimed for the first calendar year | 6 | | ending on or after the date on which the certificate is issued | 7 | | by the Department. | 8 | | (d) The credit shall not exceed $2,500 per new employee | 9 | | hired. | 10 | | (e) The net increase in full-time Illinois employees, | 11 | | measured on an annual full-time equivalent basis, shall be the | 12 | | total number of full-time Illinois employees of the applicant | 13 | | on the final day of the incentive period, minus the number of | 14 | | full-time Illinois employees employed by the employer on the | 15 | | first day of that same incentive period. For purposes of the | 16 | | calculation, an employer that begins doing business in this | 17 | | State during the incentive period, as determined by the | 18 | | Director, shall be treated as having zero Illinois employees on | 19 | | the first day of the incentive period. | 20 | | (f) The net increase in the number of full-time Illinois | 21 | | employees of the applicant under subsection (e) must be | 22 | | sustained continuously for at least 12 months, starting with | 23 | | the date of hire of a new employee during the incentive period. | 24 | | Eligibility for the credit does not depend on the continuous | 25 | | employment of any particular individual. For purposes of this | 26 | | subsection (f), if a new employee ceases to be employed before |
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| 1 | | the completion of the 12-month period for any reason, the net | 2 | | increase in the number of full-time Illinois employees shall be | 3 | | treated as continuous if a different new employee is hired as a | 4 | | replacement within a reasonable time for the same position.
| 5 | | (g) The Department shall promulgate rules to enable an | 6 | | applicant for which a PEO has been contracted to issue W-2s and | 7 | | make payment of taxes withheld under Section 704A of the | 8 | | Illinois Income Tax Act for new employees to retain the benefit | 9 | | of tax credits to which the applicant is otherwise entitled | 10 | | under this Act. | 11 | | (Source: P.A. 96-888, eff. 4-13-10; 96-1498, eff. 1-18-11; | 12 | | 97-636, eff. 6-1-12.)
| 13 | | Section 95. No acceleration or delay. Where this Act makes | 14 | | changes in a statute that is represented in this Act by text | 15 | | that is not yet or no longer in effect (for example, a Section | 16 | | represented by multiple versions), the use of that text does | 17 | | not accelerate or delay the taking effect of (i) the changes | 18 | | made by this Act or (ii) provisions derived from any other | 19 | | Public Act.
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